$128B SGR Repeal Deal Needs a Payment Plan

"The longer Congress didn't deal with it, the less palatable it became for doctors and other providers. A 25-percent pay cut would put most physicians out of practice, out of business… No business can absorb that kind of pay cut."

Rich Scheinblum, VP of fiscal services at Monadnock Community Hospital in Peterborough, NH, says it's critically important to end the uncertainty linked to the cycle of annual SGR extensions and threats of reimbursement cuts.

"Assuming it goes through, at least it will provide some sense of stability over the next five years as our organization grapples with all the changes in healthcare delivery," Scheinblum said. "Hopefully, both parties will come together on a permanent fix before the legislation expires."

Transition to Value-Based SystemIn addition to providing a period of provider payment stability, the SGR repeal deal proposes a series of reforms intended to transform Medicare reimbursement to a value-based system.

Advocates for a value-based system say the fee-for-services model gives physicians an incentive to order unnecessary tests and procedures, which drives up costs. "Doctors were encouraged to fit in as many procedures as possible," said a legislative aide to US Rep. Allyson Schwartz, (D-PA), who introduced a bill with Congressman Joe Heck, (R-NV), that helped form the framework of the SGR repeal deal.